Labour is calling on the Government to adopt a "wood-first" policy, as it says foreign interests are "literally squeezing to death" New Zealand's forestry contractors.

Opposition forestry spokesman Shane Jones said the industry was suffering while most of its timber was being shipped offshore.

He also said it was time New Zealand started treating the forestry industry as a strategic national asset, in much the same way it managed quotas for the fisheries industry.

Residential construction in New Zealand was an increasing business, and with about 20,000 new homes being built this year it was expected to get bigger.

It was expected the number of new builds would increase to 40,000 annually from next year, particularly in critical housing areas like Auckland and Christchurch.

"Logs have to be made available at a durable and competitive based rate for the New Zealand industry," Jones said.

He said much of the building steel coming into the country was Asian steel, and its quality was still under debate, while cement producers in New Zealand - such as the Swiss-owned Holcim - were preparing to import cement from overseas.

This should leave the door open for greater investment in the forestry industry, Jones said, which could reduce the number of deaths and workplace accidents.

"Indeed the man who died [in July] from Tokoroa after 27 years in the industry, only ever got $16 an hour," he said.

"It's not fair to blame that man for perceived skill handicaps - the blame needs to be sheeted home to New Zealand-based managers on behalf of the foreign owners who are literally squeezing contract workers death.

"They can afford to pay them better money, that will allow the contractors to invest more in their people and invest in better technology and actually lessen the danger in the forests."

Labour Minister Simon Bridges has ruled out holding an inquiry into the safety of the forestry industry, after eight workers were killed in forestry accidents this year.

New Zealand exported three million cubic metres of logs to China in the three months ending September.

That was a 40 per cent increase on the year before, a situation the Wood Processors' Association called critical.

Chief executive Jon Tanner said the Government needed to take a long-term approach.

"We're looking at unprecedented demand for logs in China, and if log prices stay high and we struggle to pay that price that will make things difficult."

He said that considering it took 25 to 30 years to grow a tree, it was surprising the Government didn't have a long-term policy for the forestry industry.

"And when you look at their objectives regarding social policies - building houses - and environmental policies, a wood-first policy [as proposed by Labour] isn't too far out of line with what they're doing already," he said.